Project Management in hospitality and tourism
Transcript of Project Management in hospitality and tourism
-
8/13/2019 Project Management in hospitality and tourism
1/21
MHTP: Managing Hospitality and
Tourism Projects
Level 7 Postgraduate Diploma in
Hospitality and Tourism
Management
West City College
-
8/13/2019 Project Management in hospitality and tourism
2/21
Table of Contents
Part 1 Discussion Paper..................................................................................................3
Approaches to the Project...............................................................................................3
Theories and Concepts in Project Management.............................................................4Cost Benefit Analysis ............................................................................................4
Project Management oft!are .............................................................................."
#antt$s Chart.........................................................................................................."
Part % Project &eport......................................................................................................'
(ntroduction ...................................................................................................................'
&ossmore )otel* an (ntroduction ..................................................................................'
The Proposed Project .....................................................................................................+
elected Approach to the project , Traditional Approach.............................................+
&ationale -ehind choosing this Project .......................................................................1
Project Aims and /uantifia-le 0-jecties ..................................................................1
&esources re2uired and organiational issues associated !ith project........................11#uest room refur-ishment , Cost Benefit Analysis.....................................................11
easi-ility study ..........................................................................................................1%
5et Present 6alue ................................................................................................13
(nternal &ate of &eturn7........................................................................................14
(mpact of not implementing the Project ..............................................................14
Detailed Project Plan....................................................................................................18
#ant$s Chart ................................................................................................................1+
&is9 and Measures to Control it...................................................................................1+
Measures to control the ris9 ........................................................................................%
&eferences ...................................................................................................................%
Murphy P.: Murphy A.: %4: trategic management for tourism communities7
-ridging the gaps: Channel ie! pu-lications: ;
-
8/13/2019 Project Management in hospitality and tourism
3/21
Part Discussion Paper
!pproac"es to t"e Project
Project management approaches ena-le organisations to accomplish projects
efficiently: addressing -oth internal constraints and dynamic e>ternal situations in the
interim. Project management ena-les organisations to preent or remoe internal
project constraints and also adapt to unforeseen changes in project scope or goals
?ran9 D.: %1%@. An organisation can: depending on its re2uirements: either adopt a
standard project management approach or com-ine multiple approaches.
Different Approaches to project management are as follo!s
Traditional !pproac"
(n this approach it is assumed that scope and goals of a project !ill remain same till
the project is completed. Planning is done -y the project manager that inoles
identifying the project resources. The phases in the traditional approach are as follo!s Project initiation
Project planning and design
Project monitoring and control
Project e>ecution
Project completion
This approach is not fle>i-le ad there is no scope of change during process. Thus
many companies chose the hy-rid approaches ?
-
8/13/2019 Project Management in hospitality and tourism
4/21
-
8/13/2019 Project Management in hospitality and tourism
5/21
tage17 Calculation of social costs social -enefits is the first stage in this
analysis. This !ould include calculation of7
Tangi-le Benefits and Costs ?i.e. direct costs and -enefits@
(ntangi-le Benefits and Costs ?i.e. indirect costs and -enefits ,
e>ternalities@
This process is ery important , it inoles trying to identify all of
the significant costs -enefits
tage %7 * Discounting the future alue of -enefits * costs and -enefits accrue oer
time. (ndiiduals normally prefer to enjoy the -enefits no! rather than later , so the
alue of future -enefits has to -e discounted
tage 37 * Comparing the costs and -enefits to determine the net social rate of return
tage 47 * Comparing net rate of return from different projects , the goernment may
hae limited funds at its disposal and therefore faces a choice a-out !hich projects
should -e gien the go*ahead
The shortcomings of this analysis are that all the costs cannot -e determined for
e>ample there are some intangi-le costs to the project that cannot -e measured or
identified. The cost such as la-our cost: material cost can -e measured -ut the alue
attached to destruction of ha-itat is priceless. eryone influenced -y the project may
not -e coered -y the cost -enefit analysis. (n construction projects such as an airport
or a road the enironmental cost is difficult to determine. There are many sta9eholders
that are influenced -y the project. The influence of one group can -e negatie and at
the same time it could -e positie on other group.
&easibility 'tudy
The feasi-ility study inoles studying that project is ia-le financially as !ell as
-eneficially. The feasi-ility study is a-out measuring the financial ia-ility !ith the
help of methods such as pay-ac9 period: internal rate of return: net present alue. All
these analysis tells the financial gains that can -e made -y the project. The financial
gains are measured considering all the aria-le for e>ample cost of finance: present
alue of money. The pay-ac9 method simply considers the period in !hich the
-
8/13/2019 Project Management in hospitality and tourism
6/21
inestment is coered. The net present alue of the future profits is calculated through
5P6 analysis. These are some of the financial calculation that helps in determining
the feasi-ility of the project
Project Management 'oft(are
ith the help modern technology: soft!are has -een deeloped to record the
information on project or assist them during the different phases. These are the tools
that help to implement the 9no!ledge and information in planning the resources and
schedule of the project !ith the help of graphs: charts and diagrams. These ma9e
reie!ing each stage of project easy !ith the help of reports generation. There are
many project management soft!are aaila-le in the mar9et. The soft!are for e>ample
#antt chart and time sheet trac9ing help in -etter coordination team mem-ers.
ome of the soft!ares are7
P#)T C"art ?Program aluation and &eie! Techni2ue@7 (t helps in trac9ing and
determining the path follo!ed for the project.Time '"eet Trac*ing, This soft!are ena-les different team mem-er to diide their
time and tas9s in the project those go simultaneously. This soft!are records the time
spent on each tas9 !hich can -e reie!ed -y the management at regular interal.
+roup Management, This is an email message centre that helps team mem-ers of
project communicate !ith each other during the project. The project related chat can
-e done using this soft!are as it has function send diagrams: graphs and charts.
+antt,s C"art
#antt Charts ?also 9no!n as #antt Diagrams@ are useful tools for analying and
planning more comple> projects. They help to plan out the tas9s that need to -e
completed and gies a -asis for scheduling !hen these tas9s !ill -e carried out.
hen a project is under !ay: #antt Charts helps to monitor !hether the project is
on schedule. (f it is not: it allo!s you to pinpoint the remedial action necessary to
-
8/13/2019 Project Management in hospitality and tourism
7/21
put it -ac9 on schedule. According to ield and
-
8/13/2019 Project Management in hospitality and tourism
8/21
Part . Project )eport
/ntroduction&efur-ishing of hotels is increasing no! days as hotels get the added adantage of the
renoated parts !hile they continue to operate the other parts and 9eeping the inflo!s
of the cash. Thus the money earned in this process can -e spent on the renoations.
)otels !elcome many customers round the year unli9e homes or offices. The guests
of hotel stay for fe! days and as a result the !ear and tear is higher than in homes or
office. The maintenance of the facilities -ecomes ery important for the hotels as they
hae to deal !ith the different guests each time. #uest just !ants eerything perfect in
their room !hile they use the hotel. This ma9es perfect sense for the hotels torefur-ish the some parts or hotel after a regular interal. )o!eer: maintaining the old
furniture or facilities is different than refur-ishing. 5o! a day: hotels prefer to inest
in something ne! rather than spending money on maintenance. The modern
technology has made it 2uite conenient to refur-ish a part !ithout much distur-ance
to other parts. Also it has -ecome 2uic9er. >perts are a-le to refur-ish many rooms
in single day.
This report is -ased on the project underta9en -y &ossmore )otel to refur-ish its
guest rooms. This project is a major project that needs careful planning and e>ecution
!hich is essential in Project Management. (t includes the approach ta9en for the
project: cost and -enefits and a detailed plan of project. (t also comprises the arious
ris9s related to the project and !ay they can -e minimised. This report gies an idea
that !hat project management is a-out in real life. (t is a practical implementation of
arious theories and concepts of Project Management in )ospitality (ndustry.
)ossmore Hotel0 an /ntroduction
&ossmore )otel is situated in an ast Eondon to!n called (lford. (t is a small hotel
haing 88 rooms. (t !as -uilt in 1+'+. (t is ideal for the people !ho don$t !ant to
spend a lot on their accommodation. (t is -ecoming a landmar9 in ast Eondon: and is
perfectly located !here EondonFs reno!ned ast nd meets the City. (t is situated at
1 minutes !al9 from Eondon Tu-e station from !here city can -e reached in %
minutes -y train. (t !as opened 1 years ago and has -een 9no!n for the 2ualityserice and alue for money among its guests. There are + permanent employees in
-
8/13/2019 Project Management in hospitality and tourism
9/21
the hotel and a-out 1 to 1% employees temporarily hired during the pea9 season. The
organisation structure of hotel can -e seen in the follo!ing figure.
T"e Proposed Project
Refurbishment of guest rooms in the hotel
The )otel management is -een loo9ing for!ard to change the design of guest room in
the hotel. They are thin9ing a-out the project since a long time as many guest rooms
need a through refur-ishment as they hae old design and are !orn out. (nstead of just
fi>ing those particular rooms: management is a-out to underta9e a project to refur-ish
all the guest rooms and change their design according to modern times. This !ill cost
more than just fi>ing the needy rooms -ut: management is e>cepting to raise their
profits as a result of this refur-ishment.
'elected !pproac" to t"e project 1 Traditional !pproac"
Different project management approaches are designed for easily carrying out the
different process in a planned !ay for accomplishing all the re2uirements. ach
approach hae 9ey feature of its o!n !hich 9eeps the actiities in sync !ith the
project plan ?ran9 D.: %1%@.
ince this is a project that inoles construction in the hotel: the -est approach to
carry on the project !ill -e traditional approach. )ere the planning is most important
part for the project. &ather than follo!ing any other approach li9e eent chain
approach in !hich schedule is affected -y the preious eents or the P&(5C%
approach in !hich deiation is o-sered against the plan: the -est approach is
traditional.
The construction in the project !ill re2uire planning and design in a traditional !ay.
Planning is the most important aspect in this project. (n the construction projects there
are not many o-stacles that cannot -e ascertained in the -egging. Thus if is the
planning is good: it can -e assured that the project !ill gie desired outcome.
-
8/13/2019 Project Management in hospitality and tourism
10/21
)ationale be"ind c"oosing t"is Project
There is lot of competition in the area as many more hotels hae -een constructed
around it. And in order to attract more customers and fight the competition this could
-e helpful. Though this hotel is not a complete lu>ury hotel -ut still: management
!ants to change the design of the rooms according modern needs. According to
Eangdon and erest ?%%@ hotel refur-ishment is important to sustain the position:
hospitality industry once in fie to seen years. The &ossmore hotel !as -uilt %4
years ago. (n this hotel: e>cept fe! fi>ing jo-s: no major redesigning or refur-ishment
jo-s are done until no!. Thus this project is significant and suita-le for the
management to underta9e in this scenario.
The demographic changes and innoations from niche operators has made it
important for the hotels to ma9e the changes in e>isting design. Eangdon and erest
?%%@ says there are three 9ey areas in !hich hotels are responding to changes !hen
it comes to refur-ishing the rooms.
ie
Aesthetics
/uality
Thus in order to meet the re2uirements of current mar9et and ma9e the customers
satisfied: this project is significant.
Project !ims and -uantifiable 2bjectives
&oom sies of % rooms in ground and 1stfloor of -uilding to -e increased
Bathroom in all 88 rooms to -e improed
(T and ntertainment in all 88 rooms to -e improed
&edecorations of all rooms to -e done changing the ceiling and floors
designs
-
8/13/2019 Project Management in hospitality and tourism
11/21
)esources re3uired and organi4ational issues associated (it"
project
inance and e>pertise in hotel refur-ishment are the t!o main resources re2uired to
accomplish the project. inance re2uired can -e calculated !ith the help of this ta-le
as proided -y a refur-ishment e>pertise company.
0rganisational (ssues pertaining to the resources are o-taining the finance.
There are many specialist companies offering their e>pertise in this area. A detailed
document !as produced mentioning all the re2uirements. These re2uirements !ere
specified -y mem-ers of senior management in a meeting. Then meeting !ith four
companies specialising in hotel refur-ishing projects !as held and 2uotes for the jo-
!as ta9en. 0ne company called Chorus #roup is finalised to carry on the project.
+uest room refurbis"ment 1 Cost %enefit !nalysis
&inancial Cost
lement cost in G
Alterations and demolitions 1:'4
(nternal !alls and partitions 1+:%8
all finishes 183:H8'
loor finishes 111:H"
Ceiling finishes 8%:%'
urniture and fittings 118:H"
anitary fittings 18:
Disposal installations H:
lectrical installations 1++:'"
-
8/13/2019 Project Management in hospitality and tourism
12/21
Communications installation %1:
Builders$ !or9 in connection H:
Preliminaries and contingencies %H+:"
Total construction cost 1:%%4:1'
5on inancial Costs
5on operation of the rooms under refur-ishment
Distur-ance or inconenience to the guests during the
refur-ishment.
Approal from goernment authorities
%enefits of )efurbis"ment
Major refur-ishment can hae a dramatic effect on the performance of a
hotel. (n the first year of operation follo!ing the completion of a
refur-ishment at the aoy #roupFs Claridges in central Eondon in
1++': turnoer increased -y 3'I and profita-ility -y more than +I.
imilarly: Ee MeridienFs planned G+m ma9eoer of #rosenor )ouse
in central Eondon should see its alue increase -y 'I to G"m
?!!!.-uilding.co.u9@.
(t has -een calculated that hotels sae up to 'I !hen deciding to
refur-ish as the costs re2uired to maintain something older far out!eigh
the refur-ishment ones ?Dalton A: %1%@.
(ncreased customer satisfaction
&easibility study
(n order to analyse the feasi-ility of the study: it has to esta-lished the re2uired
resources are aaila-le. Also: it is to -e ascertained that the project !ill -e -eneficial
to the hotel. The -enefits can -e tangi-le as !ell as non tangi-le. The tangi-le -enefits
can -e in form of monitory gains: increase in the profits. To calculate that the project
http://www.building.co.uk/http://www.building.co.uk/ -
8/13/2019 Project Management in hospitality and tourism
13/21
!ill -e -eneficial let us first calculate that time period ta9en to pay the inested
money -ac9.
Paybac* Period:
(t is assumed that if the project is financed -y -an9 loan: hotel can get the loan at rate
of interest of HI. e assume for the calculation purpose that the !hole inestment
amount is coming from money lent -y -an9. The aerage cash flo! after deducting
the e>penses !ill increase -y 3: per year according to predictions. ;sing this
information the pay-ac9 period is calculated here.
Pay-ac9 period J 1:%%4:1'.K3 J 4.' years
Thus it !ill ta9e a-out 8 years for project to coer its money. Thus it is a faoura-le
project as time is not ery long to recoer the inestment.
5et Present 6alue
(f !e consider that there !ill -e no major changes in the mar9et in ne>t fie years
after the inestment. ith the rate of interest of HI the cash flo! analysis and 5P6 is
calculated -elo!.
HI
Lear 5et Cash lo! Discounted
Cash lo!
*1:%%4:1'. *1:%%4:1'.1 3. %'3H3.'3
% 3. %"%31."%
3 3. %44''+.3"
4 3. %%''"'.8"
8 3. %13'+8.'8
Totals .789.;
-
8/13/2019 Project Management in hospitality and tourism
14/21
-
8/13/2019 Project Management in hospitality and tourism
15/21
Detailed Project Plan
Development 'trategy:The planning of the project is ery important asrefur-ishment should not interrupt the -usiness of hotel. All !or9s !ill
-e carried out in the phases: such that !hen one area is -eing
refur-ished: other !ill continue the -usiness. Total rooms !ill -e
diided in four sections. And each of the section !ill -e refur-ished in
one phase. The upper and lo!er floors !ill -e diided in t!o sections.
Thus there !ill -e one four phases in total in the project. (t is sho!n in
the follo!ing figure.
Project &inance7 The finance is planned to -e o-tained partly from
retained earning and partly though -an9 loan. A-out half of the amount
!ill come from the retained earnings. The half of amount is to -e
o-tained form the -an9.
(t is decided payment !ill -e diided and done according to these phase
!hich is agreed !ith the -uilder and mentioned in the contract. (t !ill
-e done in follo!ing manner
Deposit7 8I
Phase 17 %I
Phase %7 %8I
Phase 37 %8I
Phase 47 %8I
P"ase P"ase . P"ase ? P"ase >
)oom 0
.
)oom
?0.>
)oom
.>0?=
)oom
?70
-
8/13/2019 Project Management in hospitality and tourism
16/21
Legal Agreements and Contracts: There !ill -e three major
contracts in this project.
1. The -uilding contract!ill contain the roles and responsi-ilities
of -uilder and consumer. Also: this contract contains the rights of -oth
consumer and -uilder.
%. The document specification!ill contain the list of all !or9s
that are to -e carried out in this project. (t !ill also list the items to -e
supplied or installed -y the -uilder. There !ill -e some clauses that !ill
specify a-out some !or9s are to -e underta9en in a certain !ay.
3. The dra(ings or plans !ill -e the document that is prepared-y architect. These designs !ill -e approed -y the sureyor of local
-uilding authority and !ill -ear their stamp of approal.
The -uilding contract !ill coer the contractual terms a-out implied
!arranties: cost and deposits: progress and payment: cost escalation
clauses: matters such as delays and e>tension of time.
Construction:in order to 9eep the -usiness running during the project:
the construction !ill -e done in four phases.The renoation !or9
includes the demolition of old rooms: replacing the lights: preparation
of !alls: tile !or9 in -athrooms: replacing the -ath tu-s and toilet seats:
painting and carpeting.
P"ase : Construction !ill -egin from ground floor room
num-er 1*1%. (n this phase these rooms !ill -e emptied and the
area and that area !ill -e closed for guests and staff. That side
!ill -e coered -y the -uilder safety purpose. This !ill ta9e %
days. All the refur-ishment !or9 !ill -e complete in the rooms
of this area in first phase. These rooms !ill -e completely
ready for guests to use. The area !ill -e isolated !ith high
2uality hoardings to minimise the distur-ance.
-
8/13/2019 Project Management in hospitality and tourism
17/21
P"ase .:Construction phase t!o !ill -e for ground floor
rooms 13*%4. This !ill -e completed in ne>t % days in same
se2uence.
P"ase ?: (n phase three upper floor rooms !ill -e constructed.(n order to do this a temporary !ay to upper floor other than
main staircase used to reach it: !ill -e constructed. Thus this
!ill need %% days to finish the jo-.
P"ase >: The final phase !ill -e refur-ishing the rest of 1+
rooms on upper floor. A diersion !ill -e constructed in order
to reach the other rooms at upper floor. The main staircase !ill
-e used -y the !or9ers and !ill not -e accessi-le to guests and
staff during the construction. This !or9 is scheduled in %8
days.
'c"eduling
Tas* 5ame Duration 'tart &inis"
Phase 1 % days
Ei2uidate 1% &ooms 1 day
Demolition % day
&eplace Do!n lights 3 day
all preparation % day
Tile !or9 % day
Bathroom i>ing 3 day
Painting 4 day
Carpet 3 day
Phase % % days
Ei2uidate 1% &ooms 1
Demolition %
&eplace Do!n lights 3
all preparation %
-
8/13/2019 Project Management in hospitality and tourism
18/21
Tile !or9 %
Bathroom i>ing 3
Painting 4
Carpet 3
Phase 3 %% days
Construct Diersion %
Ei2uidate 1% &ooms 1
Demolition %
&eplace Do!n lights 3
all preparation %
Tile !or9 %
Bathroom i>ing 3
Painting 4
Carpet 3
Phase 4 3
Construct Diersion %
Ei2uidate 1+ &ooms 1
Demolition %
&eplace Do!n lights 4
all preparation 3
Tile !or9 3
Bathroom i>ing 8
Painting "
Carpet 4
-
8/13/2019 Project Management in hospitality and tourism
19/21
+ant,s C"art
)is* and Measures to Control it
(t is found -y the e>perts that in refur-ishment project the condition of
-uilding is the major un9no!n factor. The old hotels hae a comple>
structure that made up of stitched together -uilding. The &ossmore
hotel is also an old hotel and accessing the ris9s inoles rightly
identifying the -uilding structure. The uneen floors leel and comple>
installations are the e>pected ris9s in such projects. The ris9 can -e
compounded if irregular maintenance and technical !or9 is -een done
and is not -een recorded.
There is a ris9 of guests in the hotel -eing distur-ed during the
refur-ishment and hence haing a negatie impact on the profits of
hotel.
-
8/13/2019 Project Management in hospitality and tourism
20/21
0ne of the potential ris9s is that the !ay in !hich the e>isting structure
can hae on the ne! room layouts. These ris9s affect the desired
outcomes.
These are the potential ris9s that need to -e accessed -efore commencing the project.
Measures to control t"e ris*
According to Aramidou ?%1@: the repairing or reinforcing !or9s of a -uilding ino
les a ris9 that need to -e reduced at the minimum accepta-le leel. The ris9
controlling in the refur-ishment project: according to Mansfield &eyers ?%1@:
depends highly on the e>pert and specialist consultant. They further ela-orated that
the commission agent assesses the ris9 on the -asis of follo!ing points7
1. The e>perience and e>pertise of the organisation carrying out the
refur-ishment project
%. The design team$s reliance on the craftsmanship and specialists
3. The project is commenced !ith the incomplete information and assumptions.
Considering the all these factors can -e a !ay of minimising the ris9.
To mitigate the ris9 usually a -uilding surey is conducted -y the ris9 management
team. (t inoles analysing the -uilding fa-rics and its condition. This helps in
allocating the -udget to the potential difficult areas in the -eginning to -e a-le to stic9
to the plans.
Thus these points mentioned a-oe can -e ery helpful in controlling the ris9.
)eferences
Aramidou: 5 ?%[email protected] of Quality Assurance Systems in the
Rehabilitation of the Architectural Heritage. Hth(nternational
Conference on (nspection: Appraisal: &epairs Maintenance of
Buildings tructures: 11*13 ept %1. 5ottingham: ;nited
-
8/13/2019 Project Management in hospitality and tourism
21/21
ield M. and aminer.comKarticleKdifferent*approaches*for*project*
management: Accessed on 1%K3K%13N
http7KK!!!.-uilding.co.u9: Accessed on 1%K3K%13N
http7KK-uildingconseration.-logspot.comK%'K'Kpresering*
architectural*heritage*in.htmlAccessed on 18K3K%13N
http7KK!!!.-estpricecomputers.co.u9KglossaryKproject*management*
soft!are.htmAccessed on 18K3K%13N
http://www.examiner.com/article/different-approaches-for-project-managementhttp://www.examiner.com/article/different-approaches-for-project-managementhttp://www.building.co.uk/http://buildingconservation.blogspot.com/2008/08/preserving-architectural-heritage-in.htmlhttp://buildingconservation.blogspot.com/2008/08/preserving-architectural-heritage-in.htmlhttp://www.bestpricecomputers.co.uk/glossary/project-management-software.htmhttp://www.bestpricecomputers.co.uk/glossary/project-management-software.htmhttp://www.examiner.com/article/different-approaches-for-project-managementhttp://www.examiner.com/article/different-approaches-for-project-managementhttp://www.building.co.uk/http://buildingconservation.blogspot.com/2008/08/preserving-architectural-heritage-in.htmlhttp://buildingconservation.blogspot.com/2008/08/preserving-architectural-heritage-in.htmlhttp://www.bestpricecomputers.co.uk/glossary/project-management-software.htmhttp://www.bestpricecomputers.co.uk/glossary/project-management-software.htm